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The Moscow Laundromat -- How Deutsche Bank Helped Russians Spirit Billions Out of the Country.
The title above is the title in The New Yorker's print version, which makes me want to speculate about why the Internet version is different -- maybe something to do with Russian hackers...
Anyway, I offer this as needed perspective for those of us concerned about our country's worldwide image of our too-big-to-fail banking system, our role in money laundering schemes, or our justice system.
I find it fascinating.
Almost every weekday between the fall of 2011 and early 2015, a Russian broker named Igor Volkov called the equities desk of Deutsche Banks Moscow headquarters...speak to a sales trader ... to place two trades simultaneously. In one, he would use Russian rubles to buy a blue-chip Russian stock, such as Lukoil, for a Russian company that he represented ... for about ten million dollars worth of the stock. In the second trade, Volkovacting on behalf of a different company, which typically was registered in an offshore territory, such as the British Virgin Islandswould sell the same Russian stock, in the same quantity, in London, in exchange for dollars, pounds, or euros. Both the Russian company and the offshore company had the same owner. Deutsche Bank was helping the client to buy and sell to himself.
These transactions had nothing to do with pursuing profit. They were a way to expatriate money. Because the Russian company and the offshore company both belonged to the same owner, these ordinary-seeming trades had an alchemical purpose: to turn rubles that were stuck in Russia into dollars stashed outside Russia. On the Moscow markets, this sleight of hand had a nickname: konvert, which means envelope and echoes the English verb convert. In the English-language media, the scheme has become known as mirror trading.
Mirror trades are not inherently illegal. ...Viewed with detachment, however, repeated mirror trades suggest a sustained plot to shift and hide money of possibly dubious origin. Deutsche Banks actions are now under investigation by the U.S. Department of Justice, the New York State Department of Financial Services, and financial regulators in the U.K. and in Germany. In an internal report, Deutsche Bank has admitted that, until April, 2015, when three members of its Russian equities desk were suspended for their role in the mirror trades, about ten billion dollars was spirited out of Russia through the scheme. The lingering question is whose money was moved, and why.
http://www.newyorker.com/magazine/2016/08/29/deutsche-banks-10-billion-scandal
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The Moscow Laundromat -- How Deutsche Bank Helped Russians Spirit Billions Out of the Country. (Original Post)
ancianita
Aug 2016
OP
Deutsche Bank - the largest single recipient of funds from the bank bailout - by far.
tonyt53
Aug 2016
#1
Who? Why? Academics, artists and entrepreneurs have been leaving Russia for years, because Putin.
DetlefK
Aug 2016
#2
So now Russian encroachment comes from foreign residence of its money, art and people?
ancianita
Aug 2016
#3
I was just thinking along the lines of Crimea and northern EU small states, I guess. I'm sure
ancianita
Aug 2016
#6
Yep, and the article provides needed background on why Trump is the Russians' chump.
ancianita
Aug 2016
#8
tonyt53
(5,737 posts)1. Deutsche Bank - the largest single recipient of funds from the bank bailout - by far.
DetlefK
(16,423 posts)2. Who? Why? Academics, artists and entrepreneurs have been leaving Russia for years, because Putin.
ancianita
(35,926 posts)3. So now Russian encroachment comes from foreign residence of its money, art and people?
These people are leaving because of Putin and the russian government. I doubt that anybody has ever mixed them up with what the russian government is doing.
ancianita
(35,926 posts)6. I was just thinking along the lines of Crimea and northern EU small states, I guess. I'm sure
many would intend who leave and not return if they can help it.
geek tragedy
(68,868 posts)5. DB is also the only major bank lending to Trump nt
jmowreader
(50,528 posts)7. I was about to post this, many thanks from here
He also borrows from the Bank of China.
ancianita
(35,926 posts)8. Yep, and the article provides needed background on why Trump is the Russians' chump.